How A220 programme proved sound investment for Airbus amid pandemic

One curious effect of the air transport crisis is that it has effectively pushed the sector back in time, leaving a fleet technologically shaped to address the 2020s facing levels of demand from the turn of the millennium.

“This industry, in a matter of a year, has lost something like 15 – if not more – years of growth,” says Airbus chief commercial officer Christian Scherer.

Activity level might be back to that which existed when the Airbus A318 was entering service and the A319 was reaching peak deliveries. But Scherer believes the airframer’s ability to pitch the 100- and 130-seat sectors with the A220 – an aircraft which was still an unlaunched Bombardier concept, the CSeries, at the time – will prove an advantage during the recovery of the single-aisle market.

“We had a very timid attempt in the past with the A318 in this category,” says Scherer. “But we now have a family of products with A220-100 and -300 that clearly addresses the upper regional segment where Airbus wasn’t really present before.”

Neither the A318 nor rival Boeing’s answer, the 737-600, sold more than 70-80 aircraft and the lower end of the single-aisle battleground has since become even tougher.

When Airbus opted to re-engine its popular A319, it believed the updated aircraft would continue its predecessor’s run of success while consigning the CSeries, then a prospective competitor, to the status of also-ran.

But while the A319 and the 737-700 each managed to secure close to 1,500 orders, neither of their re-engined counterparts – the A319neo and 737 Max 7 – has been able to replicate these figures. The CSeries, however, took over 400 orders under Bombardier and Airbus has added another 337 gross orders in the three years since acquiring the programme, now the A220, in mid-2018.

CRISIS MANAGED

Scherer believes the A220 hands Airbus an advantage in the current circumstances. While Airbus cut production rates of other aircraft in its portfolio, he points out, there was no such reduction for the A220 – the airframer only “adapted slightly downward the positive slope” for the type’s ramp-up.

Airbus vice-president of programmes Philippe Mhun says the A220 was the “most active fleet in its segment during the crisis”, claiming that a minimum 50% of delivered aircraft were still being operated at the lowest point, before the figure “very quickly” recovered to higher levels.

Carriers such as Air Canada, Delta Air Lines and Swiss were operating almost all their A220s by June, while keeping substantial numbers of A320-family jets parked.

The airframer plans to increase combined monthly A220 output from its Montreal Mirabel and Mobile, Alabama assembly lines from five to six aircraft in early 2022, and its aim is for 14 by around mid-decade.

“Our order book is pretty full, we have no issue in terms of open slots,” says Mhun.

Although longer-range single-aisle aircraft have been able to encroach on routes traditionally plied by twin-aisle types, the use of smaller aircraft on such routes carries a potential comfort penalty, requiring carriers to adapt single-aisle types to feature interior configurations suitable for longer-duration flights.

Radical interior reconfiguration is less of a consideration at the regional end of the scale, but Airbus believes the basic A220 already provides advantages by offering a tailored five-abreast aircraft rather than further stretches of narrow four-abreast regional jets or inefficient shrinks of larger six-abreast models.

“It’s absolutely the reference in cabin comfort,” says Scherer.

He believes that, although the A220 has “marginally higher” trip costs than its “direct competitor”, by virtue of being 20-30 seats larger, customers will favour the range advantage and increased revenue generation potential.

“It clearly commands a value premium in the market,” he says.

But it also shifts the competitive arena, pitching Airbus more directly against Embraer at a point where the Brazilian airframer remains without a strong partner after its proposed tie-up with Boeing suddenly collapsed last year.

THINKING BIG

Over the last three years – a period in which the Embraer E195-E2 and E190-E2 have entered service – the A220’s net orders, under Airbus, have risen by over 60%, while its backlog has increased by a third to nearly 500 aircraft. Customers have strongly backed the larger -300 over the -100, and a similar pattern has emerged at Embraer, where the E195-E2 has sold better than the E190-E2. Embraer’s E2 backlog stood at 139 at the end of March.

New customer JetBlue Airways is taking the A220 to replace its older E190s. Chief financial officer Steve Priest says the carrier is “particularly excited about the outstanding economics”, giving a figure of 30% better cost-efficiency per seat over the regional jet.

“We believe this fleet will be pivotal to helping us reshape our cost structure and growing our margins,” he adds.

Lufthansa Group carrier Swiss was the launch operator of the A220 during its period as the CSeries, and has built a fleet of 30 including both the -100 and -300 variants. The aircraft has the range to integrate smoothly with its A320 fleet, offering economical capacity options.

“We use our A220 and A320-family aircraft very flexibly on the entire short-haul network, according to demand, with very few exceptions for operational reasons,” the carrier states, pointing out that the A220 is necessary for Swiss to access specific airports such as London City and Florence.

Scherer claims Chinese interest in the A220 from operators in regions “outside of the mainstream” routes, while the type has attracted interest from executive and premium operators interested in exploiting the long-range potential of low-density cabins.

Although Airbus has been enhancing the performance of the A220, with hikes in maximum take-off weight, it views the A220 and A320 families as separate products. Scherer says the lack of full commonality between the two types has “not proven to be a major handicap” and points out that there is “no such commonality” between upper-size regional jets and mid-size single-aisle aircraft.

“There are no plans to revamp or change the value proposition of the A220 or A320 to construct a common cockpit,” he says. “That’s not to say they won’t converge over time, but there are no hard plans.”